NAB’s Kaplan: Rushed Incentive Auction in 2014 Will ‘Fail’

WASHINGTON – The veritable buffet of
issues raised by the fed’s TV spectrum incentive auction proposal lead Rick
Kaplan to a singular conclusion.

“The breadth and depth of these critical issues, among many others, lead me to
one simple conclusion: If the commission insists on holding this auction—and
does so—in 2014, the auction will
almost certainly fail,” Kaplan told those gathered at a Media Institute
luncheon Monday.

Kaplan, formerly of the Federal Communications Commission, is now executive vice
president of strategic planning for the National Association of Broadcasters.
In a transcript of his remarks, Kaplan cracked wise about being invited to
speak because CTIA The Wireless chief Chris Guttman-McCabe was “unavailable.”
CTIA recently launched an offensive to secure broadcast auxiliary spectrum in
the 2 GHz band.

Kaplan said the TV channel repacking resulting from incentive auction would be
the “most robust and complex” ever undertaken.

“Whereas during the DTV transition the commission relocated approximately 100
stations, and those moves were orchestrated over several years, in this
instance, the commission is likely to relocate many hundreds of
stations, and attempt to sort through that process in a matter of minutes or
hours,” he said.

He then enumerated what he said were “a slew of tough economic, engineering and
policy choices.”

How much spectrum is allocated to licensed versus unlicensed use, for example.
How does the commission intend to attract sellers and determine how much
they’ll be paid. (I.e., the “incentive” portion of the auction provides that
broadcasters get a piece of the proceeds. No one yet knows just how big—or
small—that cut will be.) Coordination with Canada and Mexico remains up in the
air, as does the band plan. The commission proposed a split band plan to which
both the NAB and wireless providers object. It also does not designate the
status of frequency- versus time-division duplexing operations, nor how the
$1.75 billion broadcaster and cable operator relation fund will be administered
within three years of the auction. Another issue—who, if anyone, gets to
operate on the sold spectrum before it’s deployed by wireless operators.

If the FCC persists in holding the auction in June of 2014 without resolving
these issues, Kaplan said it was doomed. Either not enough stations will
participate, and/or those that remain on the air will suffer debilitating
interference, as could adjacent wireless services.

He said it was not the NAB’s to delay the auction.

“We would love to see the auction held tomorrow and it go off without a hitch,”
he said. “The longer the auction process drags on, the more we lose. The last
thing we want is this proceeding hanging over our heads any longer than it
must.”

Kaplan said there was “no question” that rushing the auction “could lead to
fewer volunteers.” He took a shot at the FCC’s LEARN website, created to “educate”
broadcasters about their auction opportunities.

“Under the remarkably strained ‘LEARN’ acronym—apparently ‘GET OUT’ didn’t work
or was trademarked--the commission has been diligently attempting to convince
broadcasters that their future as broadcasters is not as shiny as the cash the
FCC plans on waiving in front of them to exit the business,” he said. “Let’s
face it, that money will come in handy given the kind of resources one needs
these days to pay those steep cable and smartphone bills.”

For the auction to work, Kaplan said broadcasters will need to know where the
commission needs stations to voluntarily give up all or part of their 6 MHz
license, and how much they’ll get for it, and even how to participate in the
auction. He brought up past examples of efforts to redesignate spectrum that
did not go so well. The lower portion of the 700 MHz band that broadcasters
gave up in the 2009 digital transition now lays fallow because of unresolved
interference issues, he said. LightSquared’s spectrum plan also was derailed by
interference.

“A wide swath of essentially unused spectrum, save for the GPS receivers that
apparently have an impenetrable Star Wars-like force field around what
otherwise would be billions of dollars worth of spectrum for mobile broadband,”
he said.

On the other hand, he said that when the commission took its time and didn’t
cave to “political pressures to rush spectrum to market, the results have been
promising.” He said its decision to deny Dish’s request for a waiver on
delivering mobile services terrestrially in the S-band.

Kaplan called on the FCC to revise its band plan and put it out for another
round of comments. In addition to the split plan, the FCC is proposed a
variable plan in which the same channel can be occupied by either a TV station or a wireless provider in adjacent
markets. It won’t work, he said

“It’s basic engineering,” he said.

“The best way traditionally to deal with that problem is to ensure there is
enough geographic separation between the two services,” he said. “But in this
case, if you do that, the separation needs to be so great that the new wireless
license areas will need to be

Kaplan said the original point of the incentive auction was to create a
nationwide contiguous swath of spectrum for wireless broadband. He said to do
so, it should first “lay out a number of nationwide repacking scenarios,” and
from there determine where and how many stations it needs to participate in the
auction. It then needs to calculate how much each of those licenses would bring
at auction, and make a nationwide estimate to entice volunteers. The endeavor
should be undertaken with a priority to protect broadcasters rather than
designate guard band spectrum for unlicensed spectrum, he said.

“In my view, the FCC should spend less time trying to increase the size of guard
bands in the upcoming auction and more time protecting and cultivating the
unlicensed TV white spaces use in which it and many private companies have
already invested,” he said. “The irony here is that, if the FCC becomes so
hungry to repack broadcasters as tightly as possible to free up every last
megahertz for mobile broadband, it will eliminate the significant
unlicensed opportunities it just ‘unleashed’ just a couple of years ago.”

Kaplan said the auction proceeding was too complicated to settle with just “a
run-of-the-mill notice and comment rulemaking.”

“The commission can’t afford to get this one wrong,” he said, “and thus needs
to be as engaged as ever with industry and the public at large to ensure its
decision-making is sound.”